EU quangos are not fit for purpose

The financial crisis and the deepening economic recession continue to hit the headlines. And this is as true for the EU, in general, as it is for the UK individually or for the US.

The frictions within the eurozone, in particular, are moving up the news agenda. There are increasing concerns that some of its economies are in such profound difficulties that they will either default on their sovereign debt and/or find it all but impossible to recover – thus they will be condemned to permanent slump. And there is increasing talk of the stronger eurozone countries arranging informal bail-outs of the weaker members in order to hold the currency union together.

Rightly the EU is focusing on the prospect of deep, and possibly lengthy, recessions in many EU countries and the ongoing crises with the banking sectors. Debate about the Lisbon Treaty has all but disappeared for the time being.

Any debate about the economic needs of the EU in the context of the powerfully changing global economy in the medium to longer-term has simply disappeared. But such debates should not disappear. At some point the worst of the current recession will be over and a recovery of sorts will be established.

I am ever the optimist. And the current eurozone frictions will be resolved either by a strong move towards greater economic integration or by a reconfiguration of the union with, possibly, the weaker countries leaving the eurozone and re-establishing separate currencies.

The question will surely then be, whether the EU is sufficiently competitive and have the right policies in place to rise to the challenges of the new post-recession world.

I believe that it is very questionable. If the EU is to fully prosper the policy makers must realise that they inhabit, and will increasingly inhabit, a world which favours innovation over costly bureaucracy and decentralized flexibility over centralised rigidity. But they do not appear to realise this yet.

In a report published by the Economic Research Council and Global Vision by Dan Lewis, Director of the ERC, and Glen Ruffle, formerly of Global Vision, the authors highlight the unnecessary duplication and waste of taxpayers' money in the EU's expanding and centralised quangocracy.

The report, The Essential Guide to EU Quangos 2009, finds that the expansion of quangos has rocketed in recent years as the EU's integrationist ambitions have been pursued. In 1990 there were just two quangos, but by the end of 2008 there were 36, which cost nearly â‚¬2 billion a year.

Not merely did many of the quangos duplicate work done at national level, for example on food safety or the environment, but they also tended to crowd out private sector activity. Few were in eastern Europe where costs are lower.

The EU's default mechanism for any policy response is outdated centralised bureaucracy, and yet more outdated bureaucracy, as typified by the EU's expanding quangocracy. It is simply "not fit for purpose".